NEW DELHI, Feb. 14 -- The Supreme Court (SC) on Friday ruled that telecom spectrum is a "material resource of the community" and cannot be treated as an ordinary asset under the Insolvency and Bankruptcy Code (IBC). The decision came in the insolvency proceedings of Aircel and Reliance Communications (RCom), where lenders had sought to monetize spectrum to recover dues. A bench comprising Justice P.S. Narasimha and Justice Atul Chandurkar held that spectrum belongs to the people of India, with the government acting as trustee, and that the IBC cannot override the statutory framework governing its allocation, control and use as a public resource. The dispute centred on whether telecom operators could treat spectrum usage rights as an asset under the IBC and shield them from government recovery during insolvency. The court observed orally, "the path becomes clear by following state policy to ensure that spectrum and its benefits subserve common good, not uncommon good. For this purpose, its ownership and more importantly, its control with all its attributes, including benefits, have to be secured for its citizens." "As naturally as water knows the slope, the IBC cannot be the guiding principle for restructuring the ownership and control of spectrum," the bench added. The verdict came on a batch of petitions filed by State Bank of India and the two insolvent telecom operators challenging a 2021 order of the National Company Law Appellate Tribunal (NCLAT), which had ruled that spectrum could be transferred or sold under a resolution plan only after clearing all outstanding government dues. The bench had reserved its judgment in November 2025 after hearing detailed arguments from the central government, lenders, resolution professionals and the Committee of Creditors. In its more than 60-page judgment, the top court held that spectrum allocated to telecom service providers cannot form part of the insolvency or liquidation estate because companies do not own it. Even when recorded as an intangible asset in company accounts, operators possess only a limited right to use spectrum under licence conditions. "We hold that spectrum allocated to TSPs and shown in their books of account as an 'asset' cannot be subjected to proceedings under Insolvency and Bankruptcy Code, 2016," the judgment said. The court clarified that the IBC applies only to assets owned by a company and cannot override telecom law or the government's regulatory control over spectrum. The judgment said the government retains full control over spectrum trading and may recover dues from either or both parties where required. "These provisions collectively establish that spectrum trading is not a private commercial arrangement," the court observed. The bench also held that government dues cannot be subordinated in insolvency proceedings. "Dues payable to the Licensor.must be cleared prior to spectrum trading," it said. The ruling effectively endorses the government's position, rejects the pleas of Aircel and its group entities as well as lenders and resolution professionals, and sets aside the NCLAT's 2021 order....